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Budget, earnings and macro data to steer market through coming week

NEW DELHI: After a record-breaking run for six straight sess..

NEW DELHI: After a record-breaking run for six straight sessions, the bulls finally gave up on Thursday, leading to heavy selloff in select bluechips such as SBI, Infosys, TCS, Maruti and HeroMotoCorp.

The bank recapitalisation details came in as a damper for the state-run lenders. According to Fitch Ratings, the government's Rs 88,139-crore capital infusion in struggling public sector banks (PSBs) should help in part to mitigate risks, but bad assets resolution and continued high credit costs can hinder the sector's near-term performance.

On Thursday, the S&P BSE Sensex shed 111 points to settle at 36,050 while the broader Nifty50 index of the National Stock Exchange (NSE) also took a breather at 11,069, slipping 16 points.

Let's check out what's in store for the next week. Going by the buzz on Dalal Street, here's a look at top seven factors that may influence market –

All eyes on the Union Budget

Right now, nothing matters to the market the most than the Union Budget 2018, which will be presented on Thursday, February 1. It is going to be the biggest driver of the market. Industry bodies have been pitching for corporate tax cuts while the salaried class wants lower income tax. Also, going by the reports and speculations, LTCG tax may act as a speed bump for stock investors. Brokerage Kotak Securities says the Modi government may make it harder for investors to claim exemptions on capital gains from equity investments by implementing the LTCG tax.

Shefali Goradia, partner at Deloitte Touche Tohmatsu India LLP says, "The government has to find avenues for generating additional revenue to bridge the fiscal deficit. Tweaking the long-term capital gain break is a low-hanging fruit."

Next batch of quarterly earnings

Among the prominent names, HDFC, IDFC and Tech Mahindra will announce Q3 results on Monday, January 29, while IndianOil (IOCL) will release its numbers on Tuesday, January 30; ICICI Bank, L&T, NTPC and Vedanta are scheduled to declare their results on Wednesday, January 31. Bajaj Auto and Hindalco Industries will release their number on Friday, February 2.

Tech charts signal weakness in market

On Thursday, the Nifty50 index of National Stock Exchange (NSE) formed a Hanging Man pattern on the daily chart. A 'Hanging Man' is a bearish candlestick pattern, which is formed at the end of an upward trend. In this formation, the market witnesses significant selloff at the start but manages to recoup some of the losses and closes near the opening level at close. "The Nifty50 registered a Hanging Man kind of formation, suggesting exhaustion in the market. As the momentum oscillators on the lower time frame charts generated a sell signal, the market should ideally remain under pressure and trade sideways with a negative bias over the next few sessions," said Mazhar Mohammad of

Galaxy Surfactants on Jan 29

Galaxy Surfactants, one of India's leading manufacturers of surfactants and other speciality ingredients for personal care and home care industries, will come up with its initial public offering on Monday, January 29. The offer will close on January 31. The company will issue 6,331,674 equity shares of face value of Rs 10 each for cash. The price band has been fix between Rs 1,470 and Rs 1,480 per equity share.

US Fed's policy review

The Federal Open Market Committee (FOMC) of the US Federal Reserve will hold its next two-day monetary policy meet on Tuesday, 30 January and Wednesday, 31 January 2018. This will be Janet Yellen's final meeting as head of the Federal Reserve before Jerome Powell takes the charge. The Fed, in a widely expected move, had raised interest rates by 25 basis points (bps) to a range of 1.25-1.5 per cent in its December monetary policy meeting.

India's macro numbers

Markit Economics will unveil the result of a monthly survey on the performance of India's manufacturing sector for January 2018 on Thursday, 1 February 2018. The Nikkei India Manufacturing Purchasing Managers Index (PMI) rose to 54.7 in December from November's 52.6. A reading above 50 denotes expansion.

Crude prices remain a worry

Higher crude price is a headwind for India. On Thursday, oil hit $71 for the first time since 2014 on tighter supply and weak dollar. However, it settled lower as the US dollar rebounded from early losses and strengthened, denting support for the latest crude rally, but tight US supplies limited the commodity's decline.

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